German property prices rise to record high

Germany is experiencing a boom in the residential real estate market. And it is unlikely that it will decline in the foreseeable future. Despite the pandemic, rising prices, and the economic crisis, real estate prices increased by almost 67% compared to 2014.

In the third quarter of 2021 alone, home values ​​rose by 12%, showing a record growth rate since 2000, according to the Federal Statistical Office (Destatis). The reason for such a sharp rise in prices is called low interest rates on mortgage loans, as well as the crisis, and rising prices for building materials.

At the same time, the cost of houses and apartments increased the most (by 14.5%) in Munich, Berlin, Cologne, Hamburg, Dusseldorf, Stuttgart and Frankfurt. However, many residents of the country still plan to buy a home. The main “motivators” for this are the growing inflation and increased rents. On average in the country last year it increased by 4.1%.

Is such a significant increase in the value of real estate a “soap bubble” that will soon burst and lead to a collapse in prices? Experts predict, however, a further rise in housing prices in 2022. According to their calculations, renting apartments, for example, in the old fund of Berlin in the future will cost 8% more, in new houses – 7%. In Cologne, a slightly less significant price increase is expected – by 3%, in Hamburg and Frankfurt am Main – by 1%.

Experts note that Germany’s real estate market minimized the risk. The rise in the housing market is supported by the fact that people do not have significant debts to banks, as well as the availability of guarantees for issuing mortgage loans. The lending rates themselves are quite low with high inflation. In such a situation, many seek to buy their own housing. Will continue to invest in commercial projects and investors. Despite the fact that the real estate market in Germany does not bring huge profits, it does not carry the risk of losing capital. Suspension of growth in property prices in Germany in the near future is not predicted.

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